New Jersey pharmaceutical firm to pay Texas $71.8 million to settle Medicaid allegations

Barry Harrell

Thursday

Aug 25, 2011 at 12:01 AMDec 12, 2018 at 8:14 AM

New Jersey-based Par Pharmaceutical has agreed to pay the State of Texas $71.8 million to settle a lawsuit accusing the drugmaker of defrauding Medicaid programs in Texas and four other states by improperly inflating drug costs.

Par Pharmaceutical was one of several drug companies accused of scheming to increase sales by reporting inflated drug prices to the state Medicaid program, the Texas attorney general's office said Wednesday.

Pharmacies and wholesalers that purchased the drugs could then bill Texas for the inflated price. The lawsuit also alleged kickbacks, rebates and false price markups from the drugmakers.

"This is another in a series of these types of cases to recover taxpayers' money to the Medicaid program, money that belongs back here in Texas, that (Abbott) has successfully navigated in court," Kelley said.

A Travis County jury in February returned a $182 million verdict against one of the accused companies, Actavis Mid-Atlantic LLC, and Purepac Pharmaceutical Corp., a subsidiary. Another company, Teva Pharmaceuticals, settled in July 2010 for $51 million. A settlement with a third company, California-based Watson Pharmaceuticals, is imminent, the attorney general's office said.

Par Pharmaceutical denied any wrongdoing as part of the settlement agreement. Kelley said the attorney general's office "does not agree with that. We've never agreed with that kind of language, but it's part of the settlement agreement."

Messages left with Par Pharmaceutical were not returned Wednesday.

Texas' $71.8 million portion of the settlement was about half the total $154 million the company agreed to pay. The remaining $82.2 million was shared by Florida, Kentucky, South Carolina and Alaska, the attorney general's office said.

About $24 million of Texas' settlement will go into the state's general fund, Kelley said.

Part of the settlement will go to the federal government and to pay for the attorney general's office investigation.

Texas law also allows for a portion of the settlement to go to the whistle-blower in the case, Florida-based pharmacy Ven-a-Care.

Ven-a-Care initiated the case by filing a whistle-blower lawsuit in 2000. Texas later joined the lawsuit.

A publicly traded company based in Woodcliff Lake, N.J., Par Pharmaceutical has more than $1 billion in annual revenue. Also this week, Par Pharmaceutical announced plans to acquire California-based Anchen Pharmaceuticals for $410 million in cash.

bharrell@statesman.com; 912-2960

Additional material from staff writer Chuck Lindell .

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